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[Blogger’s Note: A couple of important events coming up in the next couple weeks give me an opportunity to showcase a great American manufacturer in this post.

First the events:

1) The 2014 Massachusetts Advance Manufacturing Summit, on April 29 at the Worcester, MA DCU Center will feature keynoter Harry Moser, a national champion for reshoring manufacturing. Through his organization, The Reshoring Initiative, Moser has highlighted the fallacies of “low cost” off shore production and created a new momentum to bring manufacturing back to the U.S. GBMP will have a booth at the conference, and we hope to see folks from our locale there.

2) On May 5-6, as part of the Shingo Institute’s annual Shingo Conference, GBMP’s Shingo Certified Instructors will be teaching the Institute’s Discover Excellence course at Whirlpool’s Findlay Operations in Findlay, Ohio.

And that brings me to the great American manufacturer, one who will not “re-shore” because, despite all of the off-shoring frenzy of the last two decades, they kept jobs here in the U.S. – they never left! Whirlpool, where I’ll be teaching on May 5-6, has always been “Made in the USA.” I asked my friend, Kevin Spradlin, Assembly Leader at Whirlpool’s Findlay Operations, to provide a guest post to tell their story. I hope you’ll find it as inspiring as I have. In fact, we’ve invited Kevin and his team to present their lean journey at the Northeast L.E.A.N. Conference in October in Springfield, MA, a great opportunity for you and your team to network with other lean practitioners like Kevin!]

O.L.D.

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Always Made in America

It is interesting to hear about companies proclaiming how they are bringing jobs back to America. Often they refer to it as re-shoring, in-sourcing, etc. The compelling part about Whirlpool’s story is that we have always been committed to U.S.-based manufacturing. Two decades ago as companies left our shores to follow “cheap” labor, we kept most of our manufacturing in the U.S. One has to ask: How did you compete when all of your competitors left? The answer is simple yet the journey has been hard. We had to develop a mindset of continuous improvement.

In the beginning, the road started with a small group of individuals completing a rigorous training called Operational Excellence. This is Whirlpool’s version of 6-sigma. At that point projects were bountiful and gains were huge. Several years of training, developing black belts and master belts through hands- on, tacit learning under the tutelage of a coach yielded tremendous results in our products and our profits. However, our top leadership was looking for more!

At the turn of this century, a core group of individuals started to study “The Machine that Changed the World.” In our initial lean journey we thought of lean as a set of tools; much like anybody on the outside looking in thought of OPEX (as we call it). However, after 5 to 6 years of starts, stops and learning, we really started to realize this is all about people! Moreover, if you really have people at all levels understand what a culture of continuous improvement is all about, a culture can truly start to change.

My own journey started well before my Whirlpool days when I was working for Delphi Automotive Systems and had the chance to work with John Shook’s TWI group. My first teacher was an individual named Jim Parcus. Jim had worked at the Georgetown Toyota facility as a team member, team leader, and area manager. Jim was introducing us to concepts and tools, but though I did not realize at the time, also behaviors I was learning by being immersed in the application of the tools. I brought that learning with me to Whirlpool, but did not truly understand Kaizen — and what behaviors it took to support Kaizen and problem solving — until I had the chance to work with the YOMO consulting group at the Marion Division from 2007-2010. During that time, I had the privilege to work with many teachers, but our main teacher was Mr. Ohba.

Mr. Ohba was the former leader of the TSSC. Mr. Ohba had a team that was tasked to come in and help us learn how to transform the Marion Division of Whirlpool. Our “target” and/or business need was to dramatically reduce the cost of our front-load dryer by $50! As part of that learning, we also transformed our behaviors and how we thought about what it truly takes to develop people in the continuous improvement way of thinking. We were also fortunate that our plant leader, Brian Gahr, had worked for several years with Mr. Ohba and learned modeling the behaviors as a leader in lean.

Mr. Ohba had a way of asking great questions to make you think, but I was always amazed by his humility. He always would say that “nobody is an expert.” I interpreted that as we are always learning. So, my biggest learning through all of my experience is that lean gives us a vehicle to do great things by unlocking the potential of our people. Lean, Kaizen, continuous improvement — whatever you call it — is the competitive advantage as long as it is used to nurture and grow your folks!

So fast forward to 2014 in humble Findlay, Ohio, and what you find is the world’s largest dishwasher plant. We have 2,200 employees and are the largest employer in Hancock County. We are part of Whirlpool’s overall Ohio presence of five plants encompassing more than 10,000 employees. Clyde sports the world’s largest washing machine plant and Marion is home to the world’s largest clothes dryer plant. Ottawa houses the upright freezer facility, and last but not least, Greenville is home to the legendary Kitchen Aid stand mixer plant. We just announced a $40M expansion to Greenville that will add 400 jobs to the plant. I am not sure any other manufacturer even makes small appliances in the U.S., let alone stand mixers. Overall Whirlpool employs 22,000 employees in North America. That is more than all of our major competitors combined! This did not happen by accident. It was a commitment to continuous improvement at all levels that fueled it. The passion for American manufacturing endures to this day.

Whirlpool is deeply committed to communities by providing good paying jobs and supporting community service. We support Habitat for Humanity, Cook for the Cure, Boys and Girls Clubs of America, and our local United Way agencies. As a matter of fact, Findlay Operations has built several Habitat homes in the community — we were the first plant to build a Habitat Home in seven days! All of the credit goes to our greatest resource: our people. Nearly half of our employees have worked at the Findlay operation for more than 20 years. We believe these jobs represent more than just a job. All of these folks live locally, shop locally, pay taxes, tithe at church, etc. Our plant is the “lifeblood” of the community. We believe everybody working here is part of something bigger than themselves. We represent something greater than just building dishwashers. We believe we are creating a legacy that will endure for generations to come!

In conclusion, Whirlpool’s Findlay Operations are on a journey to become a Continuous Improvement Organization. We want to be the “undisputed choice” when someone goes to buy a dishwasher, and they only consider buying our product. We believe in putting the customer first, the dedication of our people and stay committed to continuous improvement wherever the work is done. We will accomplish this by means of 9 principles:

Respect for the capabilities of all people

Common objectives

Business results driven through an external customer focus

All decisions are principal based not rule based

Personal development

Teamwork

Continuously improving

Decision making at the lowest level as we problem solve

Productive use of differences

Thanks Bruce for the chance to tell our story …the story of a company invested in American Manufacturing!

My son, Ben, asked me last week, “How come the bacon cooks better on Grandma’s pan?” I’d just fried up some bacon using a pan handed down from my mother, and the bacon was, as Ben noted, much more consistently cooked.

I answered my son’s question: “Value engineering,” I said with private sarcasm.

Value engineering is a concept that’s been a concern to me over the years. In engineering-speak, Value, as defined, is the ratio of function to functional cost. Value can therefore be increased either by holding cost constant while increasing function, or by reducing the functional cost without diminishing the function. However, in nearly every encounter I’ve ever had with VE the emphasis has been on reducing cost to meet price targets, with considerable license given to engineers regarding the ‘diminishing function’ decisions. In the case of the copper clad cookware, an innovative product from an earlier era, the decision to reduce the mass of the pan was clearly an attempt to reduce costs. A later VE step for this company moved the manufacture to Indonesia, an action that may have further reduced the functional cost of the product (as opposed to the total cost), but did not unfortunately save the manufacturer from bankruptcy.

There was a point in time shortly after 1975 that companies could no longer raise prices to cover cost increases, a condition described by the cost subtraction principle:

Profit = Price – Cost

Since, the customer was now setting the price, the only way to stay profitable was to reduce costs. At this point, I think, the emphasis of VE shifted away from providing value to the customer and towards retaining profits for the provider.

“What is value engineering?” Ben pursued.

“It’s a process that’s supposed to provide greater value to the customer, but has been mostly relegated to cost cutting,” I answered.

I’ve been a party to similar attempts at value engineering in which assumptions regarding value are made by engineers on behalf of the customer: “This or that particular material or dimension or specification doesn’t affect the function of the product.” Perhaps an aluminum part would be substituted for steel, or an operation, like machining, would be out-sourced to reduce labor costs. Or, if the crystal ball prophesied enough market potential for this value-engineered product, we’d buy a new machine to cut production cycle times. Strictly speaking, that method reduced the functional cost for a specific customer order. But the view from the factory floor was that these actions substantially increased part and process variety and product complexity, not a VE consideration.

Never did these projects arise from an intent to provide greater value to the customer. They always seemed to be taking something away, subtracting rather than adding value. So I’ve redubbed the process “Valu Ngineering”, kind of a contraction of the original term to connote taking value away from the customer in the name of adding it.

This winter has presented folks in my clime with a perpetual blanket of snow that hides most of the welcome signs of an approaching spring. There is one early bloomer, however, that blossoms each February, even as temperatures fall to the single digits as they did last week. The small yellow and very fragrant flowers of the Witch Hazel bush provide a shred of hope that spring is on its way.

In the world of lean transformation there are early bloomers too, persons who for one reason or another take a risk at an early stage to participate. Sometimes that participation arises from dissatisfaction with old ways, but other times from a sense of idealism about being part of something new. Whatever the reason, I’m grateful for early adopters. They bloom in the frost and require very little care and feeding. And they pave the way for later bloomers. Shigeo Shingo noted that caution over new ideas is normal. Early adopters are supernormal in that respect, but like the Witch Hazel they are a distinct minority and risk the fate of being either unnoticed or alternately martyred as sellouts to the ‘establishment.’

Too often the early adopters become the “A-team.” Because they are the first to buy in to new thinking, we overload them with projects rather than leveraging their participation to encourage later adopters. One the best improvement persons I ever worked with, Harvey C., was at first an outspoken skeptic. He had worked as a supervisor for over thirty years and had seen many improvement schemes come and go. Harvey watched the early adopters carefully and kept a journal for several months, recording the results of various JIT experiments that were running in the factory. When he could not disprove the impacts of TPS, Harvey became an incredible leader for change. Skeptics, by definition, are persons who are disinclined to accept ideas without rigorous testing. More so than early adopters, these skeptics are critical thinkers whose actions are guided by science as much as passion. Had I dismissed Harvey’s cautionary behavior, I would have probably lost one of improvement’s strongest allies. I’m grateful for later adopters too. They bring direction and legitimacy to the Lean transformation, creating an environment that favors broader participation.

Finally, there are the trailing adopters. Unlike the earlier bloomers, they may require the security of a friendlier climate in order to blossom. They require a bit more “cultivation,” but they are found in large numbers that create a momentum for improvement, sometimes referred to as “culture.” The ideal condition, as we say at GBMP, is “everybody, everyday,” but this is never the starting point for improvement, and it will not occur unless lean leaders respect and nurture every individual according to his or her proclivity to learn and develop.